On October 4, 2017, the CFPB issued a proposed rule (Proposed Rule) that would amend provisions of the 2016 Mortgage Servicing Rule relating to the timing for servicers to transition to providing modified or unmodified periodic statements and coupon books in connection with a consumer’s bankruptcy case. The proposed effective date for the Proposed Rule is April 19, 2018, the same date that the sections of the 2016 Mortgage Servicing Rule that the proposal would amend become effective.
The Proposed Rule addresses the 2016 Mortgage Servicing Rule’s provisions regarding periodic statements and coupon book requirements when a person is a debtor in bankruptcy. The CFPB learned that certain technical aspects of the 2016 Mortgage Servicing Rule regarding the timing for servicers to provide periodic statements in connection with a borrower’s bankruptcy case may create unintended challenges and be subject to different legal interpretations. For example, the CFPB indicated that certain aspects of the single-billing-cycle exemption from the requirement to provide a periodic statement or coupon book in certain circumstances and corresponding timing requirements may be more complex and operationally challenging than the CFPB intended, and that the relevant provisions may be subject to different legal interpretations. Accordingly, the CFPB is seeking public comment on the Proposed Rule that would provide greater certainty for mortgage servicers regarding the timing for providing periodic statements in those circumstances. The Proposed Rule replaces the single-billing-cycle exemptions with a categorical single-statement exemption. Therefore, under the Proposed Rule, the servicer would be exempted from providing the modified or unmodified version of the next statement that a servicer would otherwise have to provide regardless of when in the billing cycle a triggering event occurred.
Comments to the Proposed Rule must be received on or before a date thirty days after publication in the Federal Register.
The Proposed Rule is available here.